Canadian Oil & Gas Companies Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Canadian Oil & Gas Companies

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Scott Mc who wrote (9548)	2/15/2003 11:49:28 AM
From: Kerm Yerman	Read Replies (1) of 24921

Scott / Energy Trusts You asked, "is it that you don't like the trusts or it doesn't fit into your mandate?" A wee bit of both. I originally thought energy trusts didn't fit into my theme of exploration driven companies. These entities were focused on development and exploitation of properties rather than exploring. We are beginning to see that some of these trusts are becoming more active on this front. However, I am more interested in being invested into holdings for share price appreciation over that of the income component. However, that is my investment strategy. For others, they may prefer the income route. Energy Trusts are the rage of the industry right now. Even the Services Sector is emerging with them. They will always be around, but I question as to what extent. The basic reason that I am not overly fond of energy trusts is that they are paying huge premium amounts for tired acreage - in most cases. The E&P companies are taking advantage of this buying surge - as they did 2-3 years ago. Look at it in reverse mode - do you see many E&P companies knocking down Trust doors to get at their assets. Based upon a few recent acquisitions, I believe you will see the Trusts pursuing joint ventures with E&P companies on any Trust exploration acreage. The type thing they will be interested in are the leveraged deals - where the E&P company pays a higher initial expense to obtain a smaller percentage in the exploration play. Going a little further with the crystal ball - these trusts may begin to spin off small E&P companies of their own and in turn, joint venture with them. It's a financial game that comes down to performing at a lesser expense to generate the most attractive payouts for their unit holders. Keep in mind, just one man's opinion - this is mine this time around.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next